Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

BRUSSELS, March 30 (Reuters) – The 16-country euro zone’s business climate declined to an all-time low in March, pointing to shrinking industrial production in the first quarter of 2009, European Commission data showed.

The Business Climate Indicator (BCI), which helps establish the phase of the business cycle, fell to -3.58 points from a revised -3.40 in February, hitting its lowest since measurements started in 1985…..

Also have to consider all of the taxpayer money that has been placed “at risk” through asset guarantees and loan guarantees, to say nothing of all the trash that the Fed is buying from the banks.

It’ll be at least 10 years before we have a good estimate of the final cost (which will include interest on the debt used to finance all this); if we get inflation, that’ll throw a monkey wrench into the calclulations.

Barry,
Doesn’t receivership and liquidation have a cost as failure ripples through the economy? And who would be the receivers? FDIC doesn’t have the staff to run virtually the entire national banking system for God knows how long until buyers are found (anyone wanna buy a megabank? Anyone?).

And then there’s the whole question of political will. We have a Senate divided 50/50 between Democrats, turncoat Democrats, and Republicans.

You know what’s funny? The Fannie Mae and Freddie numbers. They say they’re only in for a hundred billion or so (which will soon be a couple hundred billion, but what’s a hundred billion amongst friends?) but that doesn’t include the roughly $5 trillion in mortgages they insure. The fact is that the feds are in for the whole enchilada. Not all of them will default, but that’s the potential liability and when you are managing risk, you have to manage the risk that everything goes to hell all at once. Ask AIG.

All we’re doing is trading the liquidity premium attendant to issuing and controlling the international reserve currency, a premium that is inherently linked to military strength, which is in turn inherently linked to economic strength (ask Great Britain) for a few quarters of just sub-par (instead of catastrophically despondent) economic performance. When it is over, we will likely have neither the liquidity premium, nor any hope of sustained and viable economic performance, to show for it.

A bit off-topic but did anyone else catch last night’s 60 Minutes piece on that global Internet worm that is spreading and just waiting for further “orders” on its next mission? Basically the worm is sitting largely in millions of computers around the world just collecting data on users and companies. Perhaps this is another overblown Y2K thing but they interviewed a woman last night who literally saw someone trying to move all her money out of her bank account while she was in that account looking at it. Pretty frightening stuff.

I don’t think you understood my question. Of course, no cause to. But I imagine that the paper you hold in your TD account is denominated in US currency. What I was clumsily trying to note was that one’s money is being confiscated (regardless of form) right in front of one’s eyes. This magic trick is not entertaining in the least.

Mannwich,
There are new developments on that worm just in the last day or two – they are apparently now able to identify machines, in advance, that are infected. They are trying to roll out ‘fixes’ today and tomorrow.

And on the topic of the original post: is it really right to use the term ‘bailout’ when something didn’t really get bailed out? Almost every one of the categories in that chart is on ongoing issue. Not a single one is fully resolved. Given that, the total cost is the cost of postponing, not of fixing.

According to this info, we have already spent 1.8 Trillion Dollars. I can’t tell the difference.

With all of this bailing out, are we really just trying to prop up all of the pension funds? The implosion of the financals, AIG, andGM et al. Would mean total devastation. I’m already reading that they are 75% under funded.

Reading the Atlantic Monthly article, we are definitely trying to forestall a change in lifestyles and making the hard decisions.

Dang. Wonder how that stacks up against the total amount ever spent in total by the government on curing all diseases – cancer, diabetes, cardiac, genetic, etc? Or all gov’t spending on all the sciences, ever? Or putting free solar on any house in an area that receives enough sun, free turbine for anyone who lives in the wind, and free geothermal for anyone on the side of a volcano? How much did WWII cost? How much would it cost to just buy all the dying cities in the US and turn them into farmland?

@ Mannwich The media loves computer virus/hacker stories, but I can’t think of a story that actually warranted the hysteria.

Ahab,
Who do you think they’ll hire? Who has experience running banks? Why guess what–there happen to be thousands of bankers with plenty of experience running things into the ground. You’d need so many personnel that you’d essentially have a merry-go-round where the FDIC is firing people at one institution for mismanagement and then hiring them to run another institution because it can’t get people to staff them.

Face it: The Ritholtz Plan hasn’t been thought through. And if it has, then Barry needs to make it a sticky.

All the tough talk from him that the automakers aren’t getting ANY MORE MONEY – while at the same time getting “60 days worth of capital” to come up with a better plan, which I presume is the $5B at the bottom of this list?
Dude just keeps out-Clintoning Clinton, out-Bushing Bush, out-…well, no other liars or crooks are on the tip of my tongue, so I’ll just STFU now.

Can’t afford levees for New Orleans, can’t afford universal health care, can’t afford to fund the arts, can’t afford to house the homeless, can’t afford Section 8 housing for the elderly and disabled, can’t afford ptsd treatment for returning troops, can’t afford to take care of our national parks, can’t afford to repair infrastructure, can’t afford internet for every school in the country.

This will be reversed. bail out funds and stimulous can be reversed in 2010.. besides that..

Let’s lead an American mfg program to reverse the bail-out and shove the unpaid dues back into the liberal wack-jobs in Congress rectal areas. Barney Frank most definately will enjoy that, so he gets one of our first automobiles shoved down his throat… Dry.

Anybody have any idea of the costs of dealing with failing banks if we did not bail them out? I’m curious about actual estimates for FDIC payouts and liquidation etc. I suppose it would be hard to estimate without knowing just how many banks are actually close to going under.

All that money and nothing to show for it except for some worthless preferred in a bunch of fragile, hopelessly insolvent transnational banks.

Based on this stunning demonstration of a complete lack of basic competency and common sense, expect that Bernanke, Summers, Geithner et al about due to receive Medal Of Honor from CEO Obama followed by an hour of shameless gushing as guests of honor at an all-start gala at the JFK center coming soon to a PBS station near you.

Based on these figures, why is there so much “bitching about the Autos”?
Yes, I agree…they run it like a bunch of “has beens” but to bring this up as much
as the Financial Black Mail Machine…a bit disingenuous ya think.

And Madoff looks like the biggest side bar since “if the glove doesn’t fit” came to prime time.
Each day big media is really testing my patience…

If I was part of the Federal Reserve, I believe I would be pretty damn happy right now. I just created a couple of trillion dollars (give or take) out of thin air and lent it out at interest. My god, depressions are a hell of a lot more profitable than war, although that’s next on the agenda.

The greatest scam of all time continues unabated as the intellectuals squabble over how to divvy up the crumbs.

Someone earlier posted it’s about saving pension funds. Which makes some sense. Except which fucking pension fund manager would hang around long enough to get toasted? Haven’t they heard of stop loss?

Oh, oops. The amazingly arrogant best and brightest Yale/ Harvard endowments took a bath too.

Exactly what planet are these geniuses from?

OK. To the point. All the pension funds could have been rescued and preserved for far less than will be dumped down the TARP/…./ Melanie Lane/ …. holes. And we’ll still have bankrupt pension funds and no middle class.

Well gee, what happened today with the market?

Guess Mongo lost global points with his media foray.

Did BO really think he’d score points or do the right thing over the weekend with his handling of GM?
Or is it really so bad he had no choice?

Don’t answer that.

I’m starting to sense BO wants to pick up where Clinton left off. Take care of the bankers no matter the cost. You too,as a former president, can do quite nicely as retired Manhattan global royalty.

This is blowing my notion of juicing the market as much as possible in prep for Q1 earnings.

This could be a really dumb question, but I have to ask it………..Why are we not using Iceland as a case study to determine economic policy decisions. Don’t we all agree that Iceland’s economic collapse is surely a “worst case scenario”, yet, when you look at Iceland today, a full one year in after complete collapse, it’s really not all that much worse off than the US. Unemployment is at 8.2 percent (probably better than the US), though GDP will decrease at a predicted level of 10% for 2009 (twice as bad as the US). If that’s truly a worse case scenario, why don’t we just let capitalism rule and let all these companies you list above go BK. Iceland didn’t fall off the face of the Earth. Why should we think the US would?
Once again, I apologize in advance if my reasoning is ridiculous, but I just had to ask the question……..

Who do you think they’ll hire? Who has experience running banks? Why guess what–there happen to be thousands of bankers with plenty of experience running things into the ground.
———————
I’m sorry but there are thousands of bankers out there who could have done a great job but were not given the time of day because they did not drink the Kool Aid. They pushed aside because they were not “team players”.

Anybody have any idea of the costs of dealing with failing banks if we did not bail them out? I’m curious about actual estimates for FDIC payouts and liquidation etc. I suppose it would be hard to estimate without knowing just how many banks are actually close to going under.

———————-
Just go take a look at a few balance sheets and you’ll see the level of exposure to real estate and CRE. And CRE is only starting to do down. Much more pain coming!

Who f’d this all up? “I” did – white, college-educated male, mid-career.
Let’s fire every single person in management who fits that description (which, admittedly, would probably eliminate about 80+% of the people in those positions) and start over with a management demographic that’s 80+% comprised of women, minorities, and college optional.
The women? Far more risk-averse than men, and far less willing to screw everyone just for a few more bucks in their purses.
The minorities? Far less entitled than whites.
The education? We ALL know that some of the smartest, common sensest, street-smart people we know never graduated from college. Sure, they may have attended for awhile, but didn’t finish, or maybe never started at all.

Almost $3 trillion, so far. Wow. As soon as it became clear that Bear was going down, and that a banruptcy at Bear would reveal that EVERY major financial institution in the United States had engaged in the same practices and was going to experience a similar level of crisis- and, let’s be honest- the PREVENTION of disclosure of the messy details and systemic cancer was the PRIMARY motivational factor behind the bailout of Bear- when it became clear that that had to be avoided at all costs, the government should have immediately bought ENORMOUS SHORT OPTIONS on U.S. financials.
Instead of Paulson making all that money, WE COULD HAVE MADE IT, and used those profits to pay for the bailouts. (wildbeastof finance.blogspot.com)

How is it possible to have such a MASSIVE variance in both the allocation limit and current amount figures?? For example, when comparing this one from CNN to the Bloomberg article and to the excel spreadsheet Mr. Ritholtz posted in Dec. ( http://www.ritholtz.com/blog/2008/12/calculating-the-total-bailout-costs/), CNN lists the Commercial Paper Funding Facility allocation limit as $1.4 trillion while the other two list it as $1.8 trillion . Thats a $400 billion difference! Another example, the Bloomberg and excel spreadsheet both list the allocation limit for Term Auction Facility @ $900 billion, yet CNN uses a figure of $600 billion. How is it possible for these to vary by hundreds of billions of dollars? I would expect the “current amount” to vary, but do we not even know how much money we are agreeing to throw at this anymore?? Any clarification would be much appreciated. Regardless of the differences though, all of them have a total that is seriously frightening.

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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